How to Successfully Negotiate with the US Treasury Department

Federally backed loans in serious delinquency, past the point of collection by the primary lender, often end up at the US Treasury Department. This can include student loans, Federally backed agricultural loans, and as we often see, SBA backed loans.

If you are reading this article, chances are you once took on an SBA backed loan for your business and things have not worked out as planned. The business is closed and you were unsuccessful in settling your debt. Now you ...

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How do I Settle my Debt with the US Treasury Department?

In the world of SBA collection, there exists a name that inspires fear in debtors far and wide.  If a lender is having trouble collecting, they tell a debtor they will send the matter off for collection in the “Treasury,” using the name like some taboo character parents use to scare children in behaving properly.

SBA backed debts are guaranteed by the federal government in the event of default and, like all federally supported obligations, defaulted files that do not reach a ...

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Cannot Make SBA Loan Payment. What Happens if I Default on My SBA Loan?

An SBA loan is a loan to a small business that otherwise would not qualify for a loan through normal business lenders. The small business receives the funds because the lender’s risk is mitigated by the Small Business Administration’s guarantee. If your loan goes into default, the government will cover the losses of the lender up to 90%. A great program to get our economy stimulated and likely responsible for the creation of millions of jobs.

But there is another side ...

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The Legal Defense for SBA Loan Default

When a business enters into payment default and ultimately into a debt workout with its SBA lender, the SBA and the bank often take legal action against both the borrower and guarantor on the loan. The lender will sue for breach of contract and pursue a judgement as the initial steps in foreclosure of the business and its assets. Judgements are awarded to creditors once they have sued a business and proven to the court that money was owed to them ...

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How does debt cancellation income affect your tax return?

So you’ve settled all of your debts, paid off your creditors (some for pennies on the dollar) and now you’re able to walk away and completely put your debt issues behind you, right? Not so fast! Debt cancellation income, or income from debt forgiveness is something that must be analyzed early on before you begin a debt settlement negotiation.

Many people don’t realize when they settle an outstanding debt and the creditor discharges $600 or more; they will receive a 1099-C ...

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How to get an SBA lien release on your Home

In every workout that I’ve been involved with, there is no issue that elicits a stronger emotional reaction more than the threat of losing one’s home.

Let’s face it, if you are a small business owner that has received SBA guaranteed financing, chances are that the lending bank, in conjunction with the SBA, required you to voluntarily provide them a “deed of trust” or a mortgage filing against your personal residence. The terminology and exact type of document filed varies state ...

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SBA Loan Offer in Compromise Calculator

How much can I settle for?

This is the question clients ask us every day. Almost every borrower wants to pay their bills, but when financial disaster strikes, it is not always possible to fully repay your debts when you are forced to close your business and walk away. Luckily the SBA has a specific program, designed for borrowers looking to avoid bankruptcy and make a good faith settlement with their lender.

Clients in strained financial positions always want to ...

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SBA Hardship Letter- What to include to achieve acceptance?

The SBA debt settlement process is not ever very easy or straightforward. We guide clients through this maze all the time, but many borrowers in default try and settle their debt on their own when it is relatively straight forward. The required documentation for submitting an SBA Offer in Compromise is quite simple. An SBA 770 form (the personal financial statement and monthly cash-flow statement), an SBA 1150 form (the document used to put forth the settlement offer and justification ...

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Can Bank Accounts Be Garnished in an SBA Loan Default?

 

Many clients ask us “Can bank accounts be garnished in an SBA loan default?” Simply put, yes they can. So here is what you need to know if you are at risk of being garnished in an SBA loan default.

When your business enters into default with your creditors and begins settlement or workout discussions, it is important that you take steps to protect your bank accounts.  Creditors have a variety of ways to attach and garnish both business and personal ...

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SBA Loan Modification or Loan Deferment- How to Qualify?

Negotiating a SBA loan modification or a deferment is an art – not a science. It is a delicate dance between the borrowing business, the guarantors, and the lender. The business needs to prove it is in need of assistance but it also needs to demonstrate that it is still a viable business capable of repayment. Show too much distress and the lenders deny the request and will likely elect to liquidate the business. If you demonstrate too much cash ...

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